Saturday, February 28, 2009

Bankers Complain That They're Being Trashed

Hmmmm, wonder why they're being trashed?
Maybe because banks -- and it wasn't the toothpaste factory -- irresponsibly sold bad mortgages and brought the country to its knees. I think we can safely say that the banking industry as a whole is tragic. The shoe fits. Wear it.

I think we all understand that community banks aren't the culprit here. It's the Big Bankers with the capacity to do what they did. During Obama's speech to congress he heralded an exceptional banker, Leonard Abess, who split the profits from the sale of his bank with all of his employees.

With that, Obama said not all bankers are bad but the industry needs serious regulations because when tempted with fast, easy money, they'll take it without thinking twice about the consequences.

Unfortunately, for the banking industry, it has to suffer for its bad apples. Just like we have to suffer for the bad apples who bought into those mortgages the bankers sold -- the people who bought bigger houses than they could afford, the people who irresponsibly bought houses.
Politico: The American Bankers Association has a message for the president: Stop talking trash about banks.

In his unofficial State of the Union address Tuesday night, Barack Obama said that it's "unpopular ... to be seen as helping banks right now, especially when everyone is suffering in part from their bad decisions."

In a letter to the White House, ABA CEO Edward Yingling says bankers across the country were "disappointed and concerned" with rhetoric like that.

"Mr. President, of the over 8,000 banks in this country, very few ever made a single subprime loan, and they did not engage in the highly leveraged activities that brought down Wall Street firms," Yingling said.

Yingling referred the president to statements made by Rep. Barney Frank (D-Mass.), the powerful chairman of the House Financial Services Committee, in which he said that the toxic mortgage lending that sparked the current crisis was done by mortgage brokers and others not subject to the strict rules that govern commercial banks.
If it wasn't for Barney Frank, who demanded money back from Northern Trust which took the bailout money and went partying, we wouldn't be getting $1.6 billion back. How many people's lives could actually be saved with $1.6 billion?